Sandra Diesel v. Jackson County

Petitioner seeks judicial review of an order by the

Land Use Board of Appeals (LUBA) affirming the adoption

of two ordinances by respondent Jackson County. Those ordinances

amended the county’s Land Development Ordinance

(LDO) to establish, among other things, the types of land on

which medical and commercial marijuana cultivation would

be permitted. In the first of her two assignments of error,

petitioner contends that LUBA erred when it concluded

that the ordinances’ prohibition of marijuana production

on lands zoned “rural residential” was consistent with the

county’s comprehensive plan. In her second assignment of

error, petitioner contends that LUBA erred when it concluded

that the ordinances’ prohibition of marijuana production

on rural residential lands is a “reasonable regulation”

of marijuana cultivation authorized by ORS 475B.340. As

explained below, we affirm LUBA’s decision.

We begin with a brief overview of the relevant law

and procedural history. In 1998, Oregon voters approved the

Oregon Medical Marijuana Act (OMMA), legalizing under

state law the production and sale of marijuana for medical

purposes. Or Laws 1999, ch 4. The OMMA was codified in

ORS chapter 475B. In 2014, Oregon voters approved Ballot

Measure 91, which legalized the production and sale of marijuana

for recreational use under state law. Or Laws 2015,

ch 614.1 Following the passage of Ballot Measure 91, the

legislature adopted additional legislation enacting changes

to both the medical and recreational marijuana statutes,

including the provisions at issue in this appeal. Ballot

Measure 91 and the subsequent enactments were also codified

in ORS chapter 475B.

ORS 475B.370 and ORS 475B.340 are central to

this case. As relevant, ORS 475B.370 establishes that marijuana

is “a crop” as the term is used in various farming and

1 The manufacture, distribution, dispensation, and possession of marijuana

are illegal under federal law, even when authorized by state law. See Federal

Controlled Substances Act, 21 USC § 801 et seq.; Gonzales v. Raich, 545 US 1,

29, 125 S Ct 2195, 162 L Ed 2d 1 (2005); United States v. Oakland Cannabis

Buyers’ Cooperative, 532 US 483, 486, 121 S Ct 1711, 149 L Ed 2d 722 (2001) (no

medical necessity exception to federal prohibition of marijuana production and

distribution).

Cite as 284 Or App 301 (2017) 303

agriculture statutes. Those statutes include ORS 215.203,

which authorizes local governments to adopt “exclusive farm

use” zones and defines “farm use,” in part, as “the current

employment of land for the primary purpose of obtaining

a profit in money by raising, harvesting and selling crops.”

ORS 475B.340 authorizes local governments to “adopt ordinances

that impose reasonable regulations” on businesses

licensed to produce or process marijuana or sell marijuana

wholesale or retail under Oregon’s recreational marijuana

scheme. ORS 475B.340(2). The statute sets out some exceptions

to what types of conditions a local government may

impose on those activities and defines the term “reasonable

regulations” to include, among other things, “reasonable limitations

on where a premises for which a license or certificate

for [recreational marijuana production, processing, or wholesale

or retail sale] may be located.” ORS 475B.340(1)(g).2

The facts relevant on review are brief and are

drawn from LUBA’s order and the local government record.3

McPhillips Farm, Inc. v. Yamhill County, 256 Or App 402,

404, 300 P3d 299 (2013). Following the enactment of the

relevant provisions of ORS 475B.340 and ORS 475B.370, the

county approved the two ordinances that are the subject of

this appeal: Ordinance 2016-3 and Ordinance 2016-4. The

two ordinances are identical, except that Ordinance 2016-4

was enacted as an emergency ordinance of temporary

duration and has since been superseded by the permanent

Ordinance 2016-3. For the sake of clarity, we refer to both

the ordinances as “the ordinance” for the remainder of this

opinion. The ordinance amended the county’s LDO, which

regulates land use within the county, to include various

2 ORS 475B.500 similarly authorizes “reasonable regulations” on medical

marijuana production and, as relevant, similarly defines “reasonable regulations”

as including “[r]easonable limitations on where the marijuana grow site

of a person designated to produce [medical marijuana] * * * may be located.” The

zoning provisions at issue in this case treat recreational and medical marijuana

production the same. Accordingly, and because petitioner focuses her arguments

on the recreational-use statutes, we similarly refer primarily to those statutes in

our analysis.

3 We note that petitioner asserts that, as a factual matter, marijuana was “an

outright permitted use” on rural residential land in the county before the enactment

of the ordinances, while respondent asserts that it was not. We do not decide

that issue, however, as it is immaterial to our conclusion that LUBA’s order was

not “unlawful in substance.”

304 Diesel v. Jackson County

regulations on marijuana-related land use. Among various

changes it made, the ordinance established the types of land

on which medical and recreational marijuana production

would be allowed and on which types it would be prohibited.4

Section 2 of the ordinance, under the heading Legal

Findings, states that, as a result of the recent legislative

enactments, “recreational and medical marijuana production

are considered a ‘farm use.’ The Board of Commissioners

finds the Jackson County Land Development Ordinance does

not allow a ‘farm use’ to occur within the Rural Residential

and Rural Use zoning districts.” The ordinance amended the

LDO to allow marijuana production on lands zoned exclusive

farm use (EFU), forest, and general and light industrial.

Marijuana production was not authorized on lands

zoned rural residential, rural use, urban residential, and

commercial.

Petitioner, a resident of Jackson County, testified

against the ordinance before the county board of commissioners.

After the board of commissioners adopted the ordinance,

petitioner appealed to LUBA, arguing that the ordinance

was unlawful because it conflicted with the county’s

comprehensive plan. Petitioner also argued that the ordinance

was invalid because it was not a “reasonable regulation”

as described and authorized under ORS 475B.340.

Specifically, petitioner argued that the county had to

demonstrate that it had a “substantial government interest”

in adopting the regulation in order for it to be reasonable.

LUBA ultimately rejected petitioner’s arguments and

affirmed the county’s adoption of the ordinances. Petitioner’s

arguments and LUBA’s determination of petitioner’s assignments

of error are discussed in the course of our analysis

below.

We begin our analysis with our standard of review.

On review, we may reverse or remand a LUBA order only

if it is “unlawful in substance or procedure,” “unconstitutional,”

or “not supported by substantial evidence in the

whole record as to facts found” by LUBA. ORS 197.850(9).

4 By their terms, the zoning regulations on marijuana production at issue in

this appeal do not apply to marijuana produced in smaller quantities exclusively

for personal use.

Cite as 284 Or App 301 (2017) 305

Petitioner appears to contend in each assignment of error

that the LUBA order is “unlawful in substance,” in that

LUBA erroneously interpreted the law. For that reason,

our role is to determine whether LUBA has made a “mistaken

interpretation of the applicable law.” Mountain West

Investment Corp. v. City of Silverton, 175 Or App 556, 559,

30 P3d 420 (2001). Based on our analysis below, we conclude

that LUBA correctly interpreted the applicable law.

In petitioner’s first assignment of error, she contends

that LUBA “erred as a matter of law” when it concluded

that the ordinance did not conflict with the county’s

comprehensive plan. Before LUBA, petitioner argued that,

“[t]o the extent the Ordinance prohibits marijuana production

(a farm use) on rural residential lands within the

County, the Ordinance conflicts with the County’s comprehensive

plan,” and is therefore invalid. See ORS 197.835(7)(a)

(“[LUBA] shall reverse or remand an amendment to a land

use regulation or the adoption of a new land use regulation

if * * * [t]he regulation is not in compliance with the comprehensive

plan.”). Petitioner argued that the county’s comprehensive

plan “requires that marijuana be allowed to be

grown on rural residential lands” and, as evidence, quoted

a paragraph from the comprehensive plan that discusses

the benefits of small-scale agriculture in rural areas where

“parcelization and/or residential development” has occurred.

That paragraph states:

“However, in areas where parcelization and/or residential

development has already occurred, small scale agriculture

is often the only way to keep land in productive farm use.

Encouraging a variety of types of agriculture in the county

provides a greater possibility of innovation and resiliency

in the agricultural economy.”

Additionally, petitioner quoted language from a memorandum

and a staff report by the county’s Development Services

Department in which county staff appear to anticipate that

marijuana production would be authorized on rural residential

lands.

On appeal, LUBA concluded that petitioner failed to

show that the ordinance was inconsistent with the county’s

comprehensive plan.

306 Diesel v. Jackson County

“The provision of the [comprehensive plan] that petitioner

relies on merely describes the predominant farm

uses in the county and describes small scale agriculture on

parcelized lands as one of those farm uses. The language

does not require the county to allow marijuana production

on [rural residential]-zoned land and the county’s decision

to prohibit it on those lands is not inconsistent with anything

in the [comprehensive plan] cited by petitioner.”

(Emphasis in original.) LUBA did not address the commentary

from the county staff included in the memorandum and

the staff report.

On review to us, petitioner argues that LUBA “erred

as a matter of law” in concluding that the ordinance does

not conflict with the county’s comprehensive plan. Petitioner

asserts that the ordinance’s prohibition of marijuana production

on rural residential lands “directly conflicts with

the County’s comprehensive plan[,] which states the purpose

of rural residential lands is to allow small-scale agriculture.”

We disagree. The language cited by petitioner from

the comprehensive plan is not language of requirement—

neither grammatically nor substantively. As LUBA noted,

the quoted paragraph makes a broad declarative statement,

but does not instruct or require the county to take any particular

action.

Even assuming, without deciding, that the paragraph

does require the county to encourage “a variety of

types of agriculture” in “areas where parcelization and/or

residential development has already occurred,” the county’s

decision not to allow marijuana production on rural residential

lands—just one type of agricultural use—would

not violate that command, because requiring the county to

encourage “a variety of types of agriculture” is not the same

as requiring the county to permit all types of agriculture.

(Emphasis added.)

Finally, as to the statements by the county planning

staff, petitioner does not argue—nor can she—that

such statements are binding interpretations of the county

comprehensive plan such that they could be understood to

impose a requirement on the county where the text of the

comprehensive plan itself does not. Accordingly, LUBA did

Cite as 284 Or App 301 (2017) 307

not legally err in rejecting petitioner’s arguments related to

the county’s comprehensive plan.

In petitioner’s second assignment of error, she argues

that LUBA erred in concluding that the ordinance was

a “reasonable regulation” authorized by ORS 475B.340.

Petitioner does not contend that LUBA erred in reviewing

the evidence; rather, petitioner contends that LUBA mistakenly

applied the law. As noted, we therefore review to

determine if LUBA’s order is unlawful in substance because

it made a “mistaken interpretation of the applicable law.”

Mountain West Investment Corp., 175 Or App at 559.

In her arguments before LUBA, petitioner contended

that, because the county did not make a finding

in the ordinance declaring “any substantial governmental

interest the Ordinance is supposed to promote,” the county

failed to sufficiently justify its decision not to authorize marijuana

production on lands zoned rural residential, making

that restriction invalid.5 Noting that ORS 475B.340 is captioned

“Local time, place and manner regulations,” petitioner

asserted:

“Of course, the phrase ‘time, place and manner’ is a

term of art in the law to denote the limits to which the government

may restrict a right guaranteed a person by law.

‘Time, place and manner’ regulations are most often litigated

in the context of cases involving freedom of speech.”

Petitioner then cited a pair of United States Supreme Court

cases that each considered whether a government regulation

restricting rights guaranteed by the First Amendment

to the United States Constitution was “reasonable.” Those

cases held, respectively, that such restrictions are permissible

only where the regulation advances a “substantial

government interest,” United States v. Albertini, 472 US

675, 689, 105 S Ct 2897, 86 L Ed 2d 536 (1985), and the

restriction is “narrowly tailored” to that interest, Ward v.

5 Petitioner also briefly argued before LUBA that the ordinance was not a

“reasonable regulation” because it conflicted with the comprehensive plan. As

previously noted, LUBA rejected the argument that the ordinance conflicted with

the comprehensive plan, and thus did not address it again under petitioner’s second

assignment of error. Because we conclude that LUBA did not err in that

respect, we also do not address petitioner’s argument in connection with her second

assignment of error.

308 Diesel v. Jackson County

Rock Against Racism, 491 US 781, 791, 109 S Ct 2746, 105

L Ed 2d 661 (1989).6 Accordingly, petitioner argued that,

in the absence of a sufficient governmental interest, “the

Ordinance is nothing more than an arbitrary execution of

the County’s police powers.”

As to that argument, LUBA concluded that petitioner

had “not established that marijuana production is

a protected interest under the First Amendment,” and,

therefore, the analogy to First Amendment case law was

inapposite.

“That ORS 475B.340 and 475B.500 use the similar phrase

‘reasonable regulation’ in listing the kinds of regulations

that a county or city can impose on the sale or production of

recreational and medicinal marijuana does not mean that

the legislature intended to import into review of local zoning

codes the doctrines and standards of review that courts

have applied to First Amendment speech cases.”

On review, petitioner argues that LUBA erred as a matter

of law and generally repeats the same argument, asserting

again before us that the ordinance is invalid because the

county failed to make a finding that identified “any substantial

government interest” advanced by the zoning decision.

We agree with LUBA that petitioner’s citation to

First Amendment case law is unavailing. Petitioner cites

no authority for the proposition that a county’s decision to

prohibit marijuana production in some zoning districts, but

not others, is subject to heightened constitutional scrutiny

such that the county was required to justify its decision by

identifying a “substantial government interest.” Here, the

county’s contested zoning decisions are authorized, both

generally and specifically, by statutes that petitioner does

not contend are unconstitutional or otherwise invalid. See

6 Petitioner cited a third case in which the Oregon Supreme Court ruled that

an order of the Oregon State Board of Barber Examiners setting the minimum

price a barber could charge for a haircut at $0.75 was a violation of the Due

Process Clause of the Fourteenth Amendment to the United States Constitution.

Christian et al. v. La Forge, 194 Or 450, 477, 242 P2d 797 (1952). Petitioner cites

Christian again on appeal to argue that “[a] legislative action which is arbitrary

is by definition unreasonable.” However, petitioner makes no arguments under

the Fourteenth Amendment, and we conclude that neither the facts nor holding

of Christian inform the legal issue in this case.

Cite as 284 Or App 301 (2017) 309

ORS 215.050(1) (authorizing county governments to adopt

and revise zoning ordinances); ORS 475B.340 (authorizing

local governments to “adopt ordinances that impose reasonable

regulations” on the production and sale of recreational

marijuana, and listing as an example of such regulations

“[r]easonable limitations on where a premises for which a

license [to produce marijuana] may be located”).

We pause here to note that, based on the arguments

presented, we are not deciding what is a “reasonable regulation”

of marijuana production under ORS 475B.340. Rather,

we merely hold that, contrary to petitioner’s contention,

Jackson County did not need to demonstrate a “substantial

government interest” to reasonably regulate marijuana production

on rural residential lands.

We turn to an additional argument that petitioner

asserts before us but did not fully develop before LUBA.

Petitioner contends that the ordinance, at least as applied

to the facts that exist in Jackson County, is unreasonable

because, “[b]y making the overwhelming majority of grow

sites in Jackson County illegal, the County has managed

to effectively eliminate grow sites in Jackson County.” We

understand petitioner’s argument to be that LUBA made a

“mistaken interpretation of the applicable law,” Mountain

West Investment Corp., 175 Or App at 559, when determining

what is a “reasonable regulation” as applied to the facts

existing in Jackson County.

Petitioner did not develop a significant factual record

on this issue before LUBA. Before LUBA, petitioner cited

a statement that Representative Ken Helm made during

deliberations of House Bill (HB) 3400 (2015), the bill that

enacted the provisions authorizing and defining “reasonable

regulations” on recreational marijuana production. In

discussing those “reasonable regulations,” Representative

Helm stated, in relevant part:

“I want to say a brief thing about what it means to be reasonable

because it is a subjective term. * * * The legislative

history that is important to discuss is for those jurisdictions

which allow medical and adult-use recreational marijuana

and do not opt out in some prescribed fashion, they

310 Diesel v. Jackson County

may not use their local zoning code to effectively eliminate

marijuana businesses or growth sites in their communities

by, for example, finding zones in which it is very difficult

to site these businesses, or putting them on the edge

of town where nobody wants to go, or in some other way

making it so difficult for these businesses to be sited that

the businesses won’t site in their communities. That’s not

reasonable.”

Audio Recording, House Third Reading, HB 3400, June 24,

2015, at 1:45:30 (statement of Rep Ken Helm), https://olis.

leg.state.or.us (accessed Mar 2, 2017). In her briefing before

LUBA, petitioner did not further explain how that legislative

history supported her argument. In her oral argument

before LUBA, petitioner argued that Jackson County had

effectively eliminated sites for growing marijuana in the

county by barring such sites in rural residential lands where

county residents currently grew medical marijuana.

As to the legislative history cited by petitioner,

LUBA concluded that, rather than help petitioner, “that

legislative history tends to defeat petitioner’s argument.”

LUBA focused on Representative Helm’s statement that, in

his view, an unreasonable regulation would be one where a

local government attempts to “use their local zoning code

to effectively eliminate marijuana businesses or growth

sites” by zoning those businesses or grow sites into difficult

locations or otherwise “making it so difficult for these

businesses to be sited that the businesses won’t site in their

communities.” Audio Recording, House Third Reading,

HB 3400, June 24, 2015, at 1:45:30 (statement of Rep Ken

Helm), https://olis.leg.state.or.us (accessed Mar 2, 2017).

LUBA concluded:

“Given that the county allows marijuana production in

the EFU zone and on lands zoned farm and forest, which

together comprise more than a million acres in the county,

and on industrial zoned land, the concerns stated by that

legislator about the reasonableness of zoning regulations

do not appear to be present in this case.”

LUBA drew the one-million-acre figure from a footnote in

the county’s brief, which, in turn, relied on statistics presented

to the county when it enacted the ordinance.

Cite as 284 Or App 301 (2017) 311

Petitioner argues to us that, contrary to LUBA’s

statement, “there are not more than a million acres in the

county of land zoned EFU, forest uses and industrial uses.”

Rather, petitioner argues, the record reflects that there are

only 642,661 acres of land in private ownership in the EFU,

forest resource, and commercial/industrial zoning districts

in the county. Petitioner argues further that, “just because

the land is eligible to grow marijuana does not, in fact, mean

it is available to grow marijuana,” and asserts that, in 2015,

only four properties zoned EFU were either sold or listed

for sale. (Emphases in original.) Petitioner also asserts that

“most marijuana growers in Jackson County are on smaller

pieces of land, primarily zoned rural residential,” and that,

by prohibiting marijuana production on such land, “the

County has made the overwhelming majority of grow sites

in Jackson County illegal.”

Petitioner does not argue that property in the zoning

districts where marijuana production is authorized is

unsuitable for marijuana production such that the owners of

that land cannot engage in that use. Petitioner’s argument

is that, because only a few such properties happen to have

been for sale in 2015, she and others in her position do not

have easy access to that land. We note that the only evidence

petitioner presents on appeal in support of her assertion

that such land is insufficiently available is a statistic drawn

from a letter that she herself wrote to the Jackson County

Board of Commissioners stating that there were only four

EFU-zoned properties that were sold or listed for sale in

2015. However, that assertion says nothing about whether

other land was available for rent or lease under some other

agreement, let alone the availability of land in the other

zoning districts where marijuana production is authorized.

Additionally, any zoning decision that prohibits a use in

some zoning districts, but not others, will have the effect of

making that activity unavailable to certain landowners.

Based on the limited record before LUBA and the

narrow argument presented by petitioner to us, we conclude

that LUBA did not err in concluding that, as applied to the

facts before it, the ordinance was a “reasonable regulation”

of marijuana under ORS 475B.340. Here again, petitioner’s

312 Diesel v. Jackson County

argument does not call on us to define what is a “reasonable

regulation” of marijuana under ORS 475B.340 for all purposes.

Rather, it asks us to decide whether LUBA correctly

concluded that this ordinance was reasonable as applied to

the limited facts that were presented to LUBA. Even were

we to assume that there are closer to 650,000 acres—rather

than one million—of land on which a marijuana production

business could be sited in Jackson County, petitioner still

has not shown that LUBA legally erred in concluding that

the ordinance is a “reasonable regulation.” Mountain West

Investment Corp., 175 Or App at 559.

Lastly, although petitioner argues that the county

“has made the overwhelming majority of grow sites in

Jackson County illegal” by not authorizing marijuana production

on rural residential land, that argument is undercut,

first, by petitioner’s own assertion elsewhere in her brief that

the county “was actively encouraging those who are growing

on rural residential and rural use lands to make application

with the county for a ‘non-conforming use verification

permit’ in order to make legal grow operations located on

these lands”; and, second, by evidence in the record indicating

that the county did take into consideration and included

measures in the ordinance intended to allow marijuana

producers on rural residential properties an opportunity to

come into compliance with those regulations.

In sum, petitioner has not shown that LUBA’s decision

“represented a mistaken interpretation of the applicable

law.” Mountain West Investment Corp., 175 Or App at 559.

Therefore, LUBA’s order upholding the ordinance was not

“unlawful in substance.” Id.

Affirmed.